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STATUS OF IMPLEMENTATION OF PRIOR YEARS

RECOMMENDATION
Audit Observation Recoendation
E!tent o"
I#$eentation
Cash in Bank Accounts in
the PPC Central Ofce and
Regional Ofces disclosed a
discrepancy of
P915,4419!9 as co"pared
#ith actual $ank $alances
Re%uire Central Ofce and
Regional Accountants to
prepare pro"ptly the
"onthly Bank
Reconciliation State"ents
and to i""ediately e&ect
the ad'ust"ents of long
outstanding reconciling
ite"s
(end periodic re"inders to
depository $anks to ensure
that the $ank furnishes the
PPC )ead Ofce and
Regional Ofces #ith the
re%uired $ank state"ents
#ithin the prescri$ed
period o$ser*ed in the
$anking industry
Partially
i"ple"ented
+ro" P915 ,illion the
discrepancy fro"
-../ #as reduced to
P!0. ,illion in -..!
Reiterated in +inding
1o 0
1on2closure of 0! dor"ant
$ank accounts #ith total
deposits of P104,.-9,93.
,anage"ent should
i""ediately take the
necessary "easures for
the closure and4or transfer
of these dor"ant $ank
accounts to a*oid
dor"ancy charges and
"a5i"i6e the use of these
funds
Partially
7"ple"ented
,anage"ent
su$"itted list of
closed accounts as of
13 8ece"$er -..!
8or"ant accounts
are continuously
$eing re*ie#ed and
closed
(u$sidiary 9edgers of $ank
accounts are not updated4
"aintained
,aintain and update
su$sidiary ledgers for all
$ank accounts to facilitate
the early detection of
errors, e5pedite
ad'ust"ents and to
deter"ine if total
Partially
i"ple"ented
Reg 7 : 5! $ank
accts not
updated
Reg 777 : no (9
34
Audit Observation Recoendation
E!tent o"
I#$eentation
indi*idual accounts
reconcile #ith the total in
the ;eneral 9edger
Reg 7< : not
updated
Cash Collecting Ofcer 2
Post Ofces account per
$ooks, ;eneral and ,oney
Order +und sho#s an
o*erstate"ent of
P5/,4-0,3/5 co"pared to
the $alances in the
Post"asters= Report
Reconcile cash collecting
ofcers account #ith the
actual undeposited
collections4cash on hand
as reported in the
post"aster=s reports
Re%uire the
reclassi>cations to
recei*a$le accounts of
cash shortages and losses
of Post"aster=s4Cashiers
Partially
i"ple"ented
+ro" P5/ ,illion the
discrepancy fro"
-../ #as reduced to
P50 ,illion A
"e"orandu" dated
19 August -..! #as
issued instructing all
accountants to
su$"it the analysis
of >nancial
transactions #ith
depository $ank, the
purpose of #hich is
to "onitor the cash
account transactions
Accountants are
instructed to re*ie#
the PO collections
"onthly
Reiterated in +inding
1o 5
?nreconciled (u$sidiary
and ;eneral 9edger
$alances of Cash Collecting
Ofcers Account sho#ed a
net discrepancy of
P43,-15,3.9
Reconcile the (u$sidiary
and ;eneral 9edger
$alances of the Cash
Collecting Ofcers 2
;eneral +und @ ,oney
Order +und Accounts and
prepare the necessary
ad'usting entries if
#arranted, and update
su$sidiary ledgers
Partially
7"ple"ented
Aith2on2going
i"ple"entation
Collections are not ,anage"ent should Partially
35
Audit Observation Recoendation
E!tent o"
I#$eentation
deposited in line #ith the
pro*isions of (ections 111
@ 104 of the ;o*ern"ent
Accounting @ Auditing
,anual B;AA,C <olu"e 7
and (ection 39 of P8 1445
resulting in the
accu"ulation of
undeposited collections
thus, e5posing the sa"e to
the risk of loss, "isuse or
"al*ersation of pu$lic
funds
enforce strictly the
pro*isions of (ection 39 of
P8 1445 and (ections 111
and 104, ;AA, <ol 7 and
other PPC regulations on
the prescri$ed fre%uency
of deposit of collections to
a*oid e5posure of
go*ern"ent funds to
possi$le risks of loss or
"al*ersation4"isappropria
tion
7f #arranted, ,anage"ent
should relie*e non2
co"pliant cashiers fro"
holding any position #ith
"oney and property
accounta$ilities
7"ple"ented
Processes for $ank
pick2up of deposits
fro" P8=s B1CRC
#ith on2going re*ie#
Cash ad*ances a"ounting
to P3.,113,.44 re"ained
unli%uidated contrary to
(ec !9 of P8 1445
(trictly adhere #ith
e5isting la#s, rules, and
regulations in the granting,
utili6ation and li%uidation
of cash ad*ances pursuant
to (ection !, COA Circular
1o 9/ : ..-
Partially
7"ple"ented
Aith prepared
"e"os to A4O=s
de"anding full
li%uidation of CA=s
Reiterated in +inding
1o 1-
Cash Ad*ances #ere
granted to ofcers and
e"ployees #ithout the
re%uired $ond and
additional cash ad*ances
#ere granted despite non2
li%uidation of pre*ious
ones
Cash ad*ances for
operating e5penses should
$e granted only to the
dis$ursing ofcers #ho are
properly $onded
Dnsure that the
accounta$le ofcers
should secure $onds fro"
the Bureau of Ereasury
pursuant to (ection 1.1 of
P8 1445 7n addition,
su$se%uent cash ad*ances
should only $e granted
+ully i"ple"ented
1o CA issued to
those un$onded
e"ployees
36
Audit Observation Recoendation
E!tent o"
I#$eentation
after pre*ious ones are
>rst settled
9i%uidated Cash Ad*ances
a"ounting to P9!,599 #ere
not fully supported #ith
docu"ents thus casting
dou$t on the regularity of
the transaction
(ee to it that all
supporting docu"ents are
attached to the li%uidation
*oucher of cash ad*ances
Partially
i"ple"ented
,anage"ent are still
gathering
docu"ents
Region <77 reported an
unrecorded li%uidation of
"oney order cash
ad*ances B,OCAC in the
a"ount of P!.4,!.- and
erroneous recording of
replenish"ents of ,OCA to
the Post"asters under
account 409 #orth
P--/,133 resulting in a net
o*erstate"ent of Cash
8is$ursing Ofcers :
8o"estic ,oney Order
+und $y P5//,303
,anage"ent should
prepare the necessary
ad'usting entries
1ot yet
i"ple"ented
,anage"ent are still
analy6ing @
reconciling the data
?tili6ed "oney order cash
ad*ances #ere not
reported "onthly $y "ost
post"asters and
replenish"ents #ere "ade
despite the large a"ount of
cash re"aining in the
custody of certain
post"asters4 cashiers
Re%uire the post"asters to
prepare and su$"it
"onthly reports on ,OCA
utili6ation and
replenish"ent for proper
"onitoring
+ully i"ple"ented
+or CF -..!, only
four B4C "a'or post
ofces in the region
#ere granted ,oney
Order Cash Ad*anceG
A"t of Cash Ad*
1 ECPO 15.,...
..
- ,aasin
PO
1-5,...
..
0 (ogod
PO
-.,....
.
4 Cat$alogan
PO
5.,....
.
Eotal 045,...
..
37
Audit Observation Recoendation
E!tent o"
I#$eentation
Ehese post ofces
#ith ,oney Order
Cash Ad*ance #ere
re%uired to su$"it to
the Accountant their
"onthly utili6ation
report
Cash ad*ances #ere
granted as part of HCash
Reser*es of the
accounta$le ofcer #hich is
contrary to Philpost
Ad"inistrati*e Order 1o
992./ dated ,arch 13,
1999
(top the granting of cash
ad*ances as Hcash
reser*esI pursuant to
Philpost Ad"inistrati*e
Order 1o 992./ dated
,arch 13, 1999
+ully i"ple"ented
8iscrepancy of
P4,-50,00!,130 $et#een
8ue fro" Regional Ofce
and 8ue to Central Ofce
Accounts
Reconcile regularly the
8ue fro" Regional Ofce
and Central Ofce
Accounts to ensure that all
inter ofce transactions
are recorded Central
Ofce should furnish
regularly the regional
ofces copies of JD<s as
their reference to
guarantee co"plete and
accurate recording of all
inter2ofce transactions
and to facilitate
reconciliation of the
reciprocal accounts
Coordinate #ith the
depository $ank for the
"onthly Bank (tate"ents
to keep the Bank
reconciliation up to date
Partially
i"ple"ented
Ehe reconciliation of
the reciprocal
accounts is assigned
to $ranch section
e"ployees At
present, the -..!
reports are already
su$"itted to COA
Please see attached
Anne5 C for the
status report.
Property, Plant and
D%uip"ent BPPDC accounts
#ith a net $ook *alue of
Ehe agency should
conduct physical in*entory
of all PPD, and su$"it
Partially
i"ple"ented
38
Audit Observation Recoendation
E!tent o"
I#$eentation
P-,-13,033,44! as of
8ece"$er 01, -../
representing --K of the
total assets of PPC is of
dou$tful *alidity due to the
follo#ing o$ser*ationsG
PPC2Central Ofce and
se*eral regional ofces did
not conduct physical
in*entory of property, plant
and e%uip"ent, su$"it an
in*entory report thereon
and4or reconcile the sa"e
#ith the accounting
records
report thereon duly
*eri>ed $y the )ead of
Ofce to deter"ine their
actual e5istence,
#herea$outs and
condition
Reconcile property records
#ith the accounting
records so as to deter"ine
the accurate $alances of
the PPD accounts
,aintain4update su$sidiary
ledgers and e%uip"ent
ledger cards to support the
accuracy of the $alances
in the general ledger
Co"ply #ith the
prescri$ed for"at on
in*entory report
re%uire"ents per COA
Circular 1o !.21-4 and
the 1;A( ,anual
A "e"o dated -0
Jan -..9 for the
con>r"ation of PPD
report #as issued
OAP,;2Ad"in
Ehrough property
"anage"ent di*ision
re%uired the regions
to su$"it report of
PPD in*entory last
June 0., -..!
)o#e*er, full
co"pliance ha*e not
yet attained
Reiterated in +inding
1o -
9and and 9and
7"pro*e"ents account
$alance of P-3,!-4,/.. as
of 8ece"$er 01, -../ is
not relia$le due to the
a$sence of Eransfer
Certi>cates of Eitle BECEC of
donated lots or legal
docu"ents to support
o#nership
Ae reiterate our pre*ious
reco""endation for PPC
to secure ECEs of the
donated real estate
properties
+or properties that #ere
already returned to the
donors, prepare ad'usting
entries to drop the" fro"
the $ooks
Partially
i"ple"ented
,anage"ent has
$een trying to >nd
#ays on ho# to ha*e
ECE of donated lots
to PPC
Reiterated in +inding
1o 10
Ehe $alances of 9and,
Building and ,otor <ehicle
accounts in the $ooks of
the )ead Ofce and Region
7< #ere not reconciled as of
Ae reiterate last yearLs
reco""endation to
reconcile the a$o*e2
"entioned accounts and
prepare the necessary
1ot yet
7"ple"ented
Ehe regional
accountant #as
39
Audit Observation Recoendation
E!tent o"
I#$eentation
8ece"$er 01, -../
resulting in an
a$nor"al4negati*e $alance
of P1-,545,040
ad'usting entries instructed to
reconcile records
Ehe (tructure and $uilding
account is o*erstated $y
P5,00!,430 due to the
inclusion of $urned PPC
$uildings and infrastructure
pro'ect #hich is not yet
i"ple"ented
,ake the necessary
ad'usting entries to drop
fro" the $ooks of accounts
the cost of the $urned PPC
$uildings and the
corresponding
Accu"ulated 8epreciation
Re%uire the Regional
Accountant to record
assets only upon deli*ery
of the sa"e and not at the
ti"e the o$ligation of
allot"ents #as "ade
1ot yet
7"ple"ented
7n 1CR, still
gathering data
$efore they #ill "ake
the necessary
ad'usting entries
Ehe accuracy and *alidity
of the net $ook *alue of
PPD2(tructures and Building
account is not relia$le due
to o*erstate"ent of useful
life, non2pro*ision of 1.K
sal*age *alue, and the
discrepancy of ;eneral
9edger B;9C $alances
against the 9apsing
(chedule a"ounting to
P1,!41,!.1
,anage"ent should
strictly i"ple"ent COA
Circular 1o -..02../ and
e&ect all ad'usting
entries, if necessary
Reconcile the $alances of
;9 as against the 9apsing
(chedule to ascertain the
correct4accurate a"ount of
PPD
Partially
7"ple"ented
,anage"ent is still
analy6ing @
reconciling the
$alances
O*erstate"ent of Property,
Plant and D%uip"ent
account in the a"ount of
P-3,!33,.33 due to the
ina$ility of PPC to
reclassify the
unser*icea$le properties
to Other Assets account
and *arious de>ciencies
?nser*icea$le assets
Bpending disposalC should
$e reclassi>ed to HOther
AssetsI account in
accordance #ith the
guidelines and procedures
prescri$ed in the 1;A(
,anual
Appropriate action should
$e taken $y the
Partially
7"ple"ented
?nser*isea$le assets
are still not
reclassi>ed to Other
Assets account
Ehey still *alue the
asset at P1.. per
unit
40
Audit Observation Recoendation
E!tent o"
I#$eentation
Co""ittee on 8isposal
relati*e to the
unser*icea$le properties
pursuant to (ec /9 of P8
1445
After the conduct of actual
in*entory, reconcile
in*entory schedule #ith
the accounting records to
ascertain the accuracy of
the a"ount of the
Property, Plant and
D%uip"ent account
7ndicate the appraisal cost
of the >5ed assets if the
ac%uisition costs are not
kno#n, instead of *aluing
the asset at P1.. per unit
for fair presentation of the
assets in the >nancial
state"ents
+or the property4supply
ofcer and the accountant,
they should e5ert e&ort to
locate the unkno#n4
unidenti>ed assets
Re"o*e fro" the lapsing
schedule all the tangi$le
assets, defecti*e and
disposed assets and "ake
the necessary ad'usting
entries
Drroneous
recording4treat"ent of
construction "aterials
issued in the construction
of >5ed assets resulted in
the understate"ent of t#o
di&erent accounts, the
Property, Plant and
PPC should consistently
apply and strictly confor"
#ith the pro*isions of
1;A( and Par 05, PA( - in
recording )ead Ofce and
Regional Ofce
transactions relati*e to the
construction of the
+ully i"ple"ented
Aith "onthly report
of pro'ect
construction
co"pleted
41
Audit Observation Recoendation
E!tent o"
I#$eentation
D%uip"ent BPPDC account in
the $ooks of PPC )ead
Ofce in the a"ount of
P1,.13,//4 and the
Construction 7n Progress2
Agency Assets account in
the $ooks of the PPC
Region <77 in the a"ount of
P1-3,/!0
agency=s >5ed assets
7ssuances of "aterials for
construction should $e
recorded as they occur
and that the (upply Ofcer
should prepare the Report
of (upplies and ,aterials
7ssued for construction
"aterials already issued or
consu"ed and su$"it
sa"e to the Accounting
8i*ision for the
preparation of the Journal
Dntry <oucher
At the PPC )ead Ofce, a
policy on recognition of
PPD $ased on the
pro'ect4'o$ order
co"pleted should $e
adopted and the present
practice of charging the
used "aterials related to
pro'ect to the e5pense
account $e re*ised in
order to pro*ide
procedures4
"easure"ents4 conditions
that #ould ensure the
proper charging of cost of
the pro'ect and the ti"ely
recognition or transferring
of asset fro" construction
"aterials in*entory
account
+urther"ore, the
Accounting 8epart"ent
should seek assistance
fro" the ,aintenance
8epart"ent to facilitate
actual costing of the
co"pleted pro'ect
42
Audit Observation Recoendation
E!tent o"
I#$eentation
Ehe accuracy, *alidity and
e5istence of Accounts
Recei*a$le :Erade account
cannot $e relied upon due
to the follo#ing
o$ser*ationsG
?nreconciled discrepancy
$et#een general ledger
and schedule of4su$sidiary
ledger4con>r"ation of
Postage Charge Account
BPCAC
Re%uire post"asters to
su$"it certi>cate of
"ailing4other supporting
docu"ents

Re%uire accounting to
reconcile the discrepancies
$et#een ;9 and
(94schedule of PCA
7n Region l<, re%uire
accounting to update the
(9 for PCA
Partially
7"ple"ented
Reg 7< : (9 not
updated
8iscrepancy $et#een
;9 @ (9 not yet
reconcile
7n the 1CR,
a$nor"al4negati*e account
$alances of se*eral PCA
holders a"ounting to P
-,3.3,!50 a&ected the real
$alance of PCA recei*a$les
Reclassify
negati*e4a$nor"al
$alances to the Other
7nco"e Account
7"ple"ented
Already reclassi>ed
to ,iscellaneous
7nco"e BPrior yr ad'C
per JD< 1o
.!.9.4!5 dated
94-.4.!
Collection of 1CR PCA
accounts falling under the
a$o*e 9. days category
a"ounting to P-3,/5!,-!0
or -9K of the total PCA
recei*a$les is already
re"ote
Ae reco""end that PPC
initiate the re%uest for
#rite o&
Partially
7"ple"ented
As of 940.4.9 total
Prior yr Recei*a$le
a"ounted to
P-19,!-.,1./ #4
pay"ent of
P1.3,/4/,!0-
lea*ing outstanding
$alance of
P110,./-,-/4 #4
discounts for re*ersal
a"ounting to
P05,-43,.9- upon
full pay"ent
43
Audit Observation Recoendation
E!tent o"
I#$eentation
Ehe ina$ility to i"pose
surcharge on unpaid PCA is
found in certain regions
there$y a&ecting the
inco"e account 9ike#ise,
PCA agree"ents #ere not
su$"itted4rene#ed4appro*
ed
(ee to it that Regional
Accountants $ook up all
PCA $ased on Certi>cate of
,ailing for fair
presentation of the
recei*a$les and inco"e
accounts in the >nancial
state"ents
(trictly i"ple"ent the
operating policies,
procedures and guidelines
for PCA and PPC
,e"orandu" Circular .32
.- #ith regards to the
i"position of penalties and
rene#al of per"its
Ae reco""end that PPC
initiate the re%uest for
#rite2o& of long o*erdue
accounts, particularly
those of inacti*e "ailers
Partially
7"ple"ented
Account Recei*a$le :
7nternational ,oney Order
Ehe $alance of the
Accounts Recei*a$le :
7nternational ,oney Order
sho#ed an unreconciled
discrepancy $et#een the
accounting records and the
report of the ,oney Order
(er*ice in the a"ount of
P1./,05!,!!-
Ae reiterate that the ,O(
and the ;A8 should
conduct regular
reconciliations of
su$sidiary ledgers for all
+PAs to ensure not only
that any discrepancy is
i""ediately identi>ed and
corrected $ut also that the
records of the ;A8 and
,O( agree #ith each
other
Analy6e the reclassi>ed
prior years= $alance and
e&ect the necessary
ad'ust"ents4 corrections
1ot Fet 7"ple"ented
Relia$ility and *alidity of
Accounts Recei*a$le 2
Cause the *eri>cation
and analysis of dou$tful
A JD< is dra#n for
this particular
44
Audit Observation Recoendation
E!tent o"
I#$eentation
7nternational Accounts
pertaining to prior years
a"ounting to
P1,!99,515,/44 is dou$tful
$alances Eake up
ad'ust"ents for si"ple
"iscalculation4s or
erroneous entries +or all
other *eri>ed
outstanding $alances,
consider pro*iding for
Allo#ance for 8ou$tful
Accounts and4or
i"ple"enting
appropriate legal action
Eake also into
consideration the allo#ed
o&setting of de$it and
credit $alances $et#een
+oreign Postal
Ad"inistrations
D*aluate and analy6e
un*eri>ed $alances for
the possi$le #rite2o&4
transfer of accounts
Adopt and i"ple"ent
e&ecti*e coordinating
procedures $et#een the
Accounting 8i*ision, the
7nternational Accounts
8i*ision and other
concerned Ofces
regarding reconciliation
and updating of the A4R
$alances
ad'ust"ent4
restate"ent as per
JD< nos ...1-1..
and ...1-1.- all
dated 8ec 01,-..!
An a"ount of P-3,!.-,.15
or -!4K of the
P94,41!,130 $alance of
8ue fro" Ofcers and
D"ployees account
re"ained outstanding for
long periods, thus its
classi>cation as current is
inappropriate
,anage"ent should
e5haust all ad"inistrati*e
and cri"inal sanctions to
reco*er the a$o*e
accounts fro" the
accounta$le ofcers
concerned
(u$"it re%uest for #rite2
o& for the accounts of the
Partially
7"ple"ented
45
Audit Observation Recoendation
E!tent o"
I#$eentation
deceased, resigned,
retired, dis"issed and out
of the ser*ice e"ployees
8eter"ine the reason for
non2settle"ent of these
accounts #hile the
concerned e"ployees
#ere still in the ser*ice
Ehe *alidity and ade%uacy
of the allo#ance for
dou$tful accounts in the
a"ount of P1.5,.!1,40.
cannot $e ascertained due
to the a$sence of appro*ed
#ritten policy of the
corporation in setting up
Allo#ance for 8ou$tful
Accounts
Ae reiterate our pre*ious
reco""endation to adopt
a policy on the pro*isions
for dou$tful accounts
#hich shall take into
consideration such factors
as aging of accounts,
collection e5perience of
the co"pany in relation to
the particular recei*a$les,
past and e5pected loss
e5periences, and identi>ed
dou$tful accounts
pursuant to the 1;A(
,anual
Co"ply #ith the pro*isions
of the 1;A( ,anual in the
deter"ination of the
allo#ance for dou$tful
accounts to gi*e
assurance that recei*a$les
are presented in the
>nancial state"ents at
their net reali6a$le *alue
Partially
7"ple"ented
Ehe allo#ance for
dou$tful accounts
#as esti"ated at a
"ini"u" of -K to
cope up of the
pre*ious esti"ate at
1.K
Cleared "oney order
a"ounting to P5/,3!0,353
BRegions 1 and CAR onlyC
#ere not recorded in the
regional $ooks of accounts
thus an o*erstate"ent of
the 8ue to Central Ofce
Account $y the sa"e
a"ount
Ehere should $e close
coordination $et#een
Central and Regional
Ofces to ensure that lists
of cleared "oney order is
regularly for#arded to
regional ofces
Partially
7"ple"ented
All accountants are
ad*ised to record the
said transactions on
their respecti*e
$ooks of accounts
An ad'ust"ent of the
46
Audit Observation Recoendation
E!tent o"
I#$eentation
8,O+ account #as
"ade in -..! $ased
on esti"ation of
outstanding account
considering the 9.2
day *alidity period
)enceforth, a
reconciliation of the
account shall $e
undertaken
Contingent (uspense
Account in the a"ount of
P1,1//,5/1,!14 pertaining
to the unreconciled
di&erences $et#een the
;eneral 9edger and
(chedules4(u$sididary
9edger Balances
,anage"ent should e5ert
e&ort to reconcile and
reduce the P1/! $illion
$alance of the said
contingent suspense
account
Partially
7"ple"ented
A guideline to follo#
for certain accounts
to clean up the
$alance sheet #as
issued through
Circular 1o ./2.0
dated June -../
Continuous
reconciliation and
#ork $ack of
transaction Mo# has
$een done $y the
regions As of this
date there are
regions #ho had
already segregated
the good4
su$stantiated
accounts fro" the
$ad accounts or
unsu$stantiated
accounts Only
Region 4 and Region
1. has not yet
co"plied #ith the
said circular 7n
8ece"$er -..!
Balance (heet, the
HBad AccountsI #ere
all lodged in HOther
47
Audit Observation Recoendation
E!tent o"
I#$eentation
9ia$ilitiesI account
for ease of
"onitoring and to
reMect the *alues of
the other accounts
Property, Plant and
D%uip"ent account #ith a
net $ook *alue of P
-,-13,033,44! as of
8ece"$er 01 -../
representing --K of the
total assets of PPC is
dou$tful due to no taking of
physical in*entory
Ehe agency should
conduct physical in*entory
of all PPD and reconcile
#ith e5isting accounting
records
Partially
7"ple"ented
Regions -, 3, / and
1- ha*e their ;9
$alances of PPD
tallied #ith the actual
physical in*entory
Other regions and CO
ha*e partially
updated the
schedule of PPD
in*entory
Balances of the follo#ing
in*entory accounts per
$ooks and per "onthly
accounta$ility reports of
regional custodians4supply
ofcers as of 8ece"$er 01,
-../ at the )ead Ofce,
1CR, CAR and Regions 7, 777
and N77 sho# a total
discrepancy of
P!.,343,5/-
Conduct regular
reconciliation of
accounting records against
"onthly report of
accounta$ilities of
in*entory custodians Eake
appropriate actions to
correct any discrepancies
Re%uire PPC Central Ofce
to send4trans"it co"plete
data including unit costs of
transferred supplies,
in*entories and
accounta$le for"s
Partially
i"ple"ented
(e*eral Philatelic 7te"s in
Region 7 #hich are not
re*erti$le to Postage
(ta"ps costing P91,09/
#ith a face *alue of
P005,349 #ere either slo#
or non2"o*ing due to
li"ited or lack of sales
Coordinate #ith the Chief
of the Philatelic (er*ice of
PPC at the Central Ofce
regarding the return of
slo#4non2"o*ing Philatelic
7te"s Bnon re*erti$leC
costing P91,09/ to lighten
the #orkload of the ,oney
Order and (ta"p
1ot yet
7"ple"ented
48
Audit Observation Recoendation
E!tent o"
I#$eentation
Custodian as #ell as the
Accountant
Also co""unicate the
region=s re%uest for li"ited
stock issuances to the
Chief of the Philatelic
(er*ice to ensure that
stocks of such ite"s in
Region 7 are 'ust sufcient
stocks for three B0C "onths
consu"ption only there$y
pre*enting the occurrence
of idle or e5cessi*e
in*entories
7n*entories per $ooks #ith
a total *alue of P4,53!,1/9
in Region 7< #ere not
reconciled #ith the physical
in*entory report, hence,
the $alance reMected in the
>nancial state"ent is
unrelia$le 9ike#ise,
$alance of supplies and
"aterials in the a"ount of
P/!0,499 is not relia$le
due to the failure to update
the stock cards
Ae reiterate prior year=s
reco""endation to
re%uire the respecti*e
custodian4 accounta$le
ofcer to conduct physical
in*entory of all stocks and
reconcile the sa"e #ith
accounting records on a
"onthly $asis Re%uire
the Accounting (ection to
e5ert ut"ost e&ort to
locate the discrepancies
and prepare the necessary
ad'usting entries
Ehe Property Custodian
should update the posting
in the (upplies 9edger
Card to reMect the correct
a"ount of the (upplies
and ,aterials account
1ot yet
7"ple"ented
Relia$ility and *alidity of
the Accounts Paya$le2
7nternational Accounts in
the a"ount of P-19-B is
dou$tful
Ae reiterate our prior
year=s reco""endation
that the PPC should
prepare su$sidiary
ledgers and
corresponding schedules
to support its A4P
Partially
i"ple"ented
Reconciliation of
records $et#een the
7nternational
Accounts and
49
Audit Observation Recoendation
E!tent o"
I#$eentation
7nternational Accounts
7n relation, it is also
reco""ended that a
co""itted, thorough,
and e5hausti*e re*ie#
and e*aluation of the
Accounts Paya$le :
7nternational Account=s
prior year4s= $alances $e
undertaken to $e a$le to
settle and ad'ust the
dou$tful $alances
O$ser*e proper
i"ple"entation of the
rules and regulations of
the ?P? B?ni*ersal Postal
?nionC regarding the
o&setting of credits and
de$its $et#een +PAs
B+oreign Postal
Ad"inistrationsC to
pre*ent further
accu"ulation of
additional unad'usted
$alances
Accounting 8i*ision
is on2process
Analysis of
7nternational
Accounts Recei*a$le
is continuously
conducted and
coordinated #ith 7A8,
#hich pro*ided the
list of outstanding
accounts recei*a$le
as of 8ece"$er 01,
-../, the sa"e shall
$e con>r"ed #ith
the +oreign Postal
Ad"inistrations
After con>r"ation,
Accounting 8i*ision
shall ad'ust the
$ooks accordingly
upon deter"ination
of dou$tful accounts
Ehe Accounts Paya$le in
the Cordillera
Ad"inistrati*e Region
BCARC and Region N
reported understate"ent of
P1,..!,/90 and P4,91/,9-9
respecti*ely or a total of
P5,9-3,/--, thus a&ecting
the propriety of the
account $alances
D&ect the necessary
correcting entries on the
erroneous charges "ade
on the accounts a&ected
Partially
i"ple"ented
7n Region N JD< in
-../ and -..! #ere
still traced to check if
ad'ust"ents ha*e
$een "ade
Accounts Paya$le :
?nli%uidated O$ligations of
prior years totaling
P/.,103,1-0 is unrelia$le
due to the discrepancy
$et#een the general ledger
,aintain su$sidiary
ledgers for each clai"ant
for "onitoring purposesO
D5ert ut"ost e&ort to
Partially
7"ple"ented
50
Audit Observation Recoendation
E!tent o"
I#$eentation
$alance and the schedule
of unli%uidated o$ligations
in the a"ount of
P5-,/90,391
locate discrepanciesO and
Prepare the necessary
ad'usting entries
<arious Other Paya$les
Accounts #ith a$nor"al
$alances of P1,140,-55 and
?naccounted funds held in
trust in Region <77
a"ounted to P159,0/1,
thus rendering the *alidity
and accuracy of the
accounts dou$tful
7n*estigate and analy6e
the causes of the negati*e
$alances and the nature of
the a"ount held in trust
and e&ect the necessary
ad'ust"ents
Partially
7"ple"ented
P11 ,illion of the recorded
accounts paya$le of
P!9,illion represented
clai"s #ithout supporting
docu"ents
Prepare ad'usting entries
to correct the paya$les
resulting fro" erroneous
entries
Partially
7"ple"ented
Audit
reco""endation #as
i"ple"ented,
ho#e*er, paya$les
#hich #as not *alid
in CF -..! #as still
included in the $ooks
Accounts 8ue to
(u$sidiaries4 Afliates P+O
and PP(B7 (alary loan ha*e
negati*e $alances
a"ounting to P1-! ,illion
and P041, respecti*ely or a
total of P439 ,illion
D5ert e&orts to re*ie# the
accounts #ith negati*e
$alances and identify the
cause4s for their e5istence
in the a&ected accounts
Re*ie# "isclassi>cations
and errors in postings in
8ue to PP(B7 Dducational
9oan and e&ect the
necessary ad'usting
entries
Partially
7"ple"ented
CAR and Region <777 ha*e a
total understate"ent of
P0,/99,11- in the 8ue to
B7R Account
Coordinate and confer #ith
the Regions on the
resolution of pending
re%uest for ta5 su$sidy to
$e a$le to e&ect the
1ot yet i"ple"ented
51
Audit Observation Recoendation
E!tent o"
I#$eentation
necessary ad'ust"ents or
entries in the $ooks of
accounts
Ehe inter and intra2agency
paya$les #ere
understated $y P0/0,3-/
Ae reco""end the
i""ediate correction of
errors upon disco*ery to
a*oid rush #ork at year
end
1ot yet i"ple"ented
Erust lia$ilities in Region 7<
pertaining to B7R, ;(7(,
Pag2i$ig and Philhealth in
the total a"ount of
P04,/01,5!-
Ae reiterate our prior
yearLs reco""endation to
reconcile the recorded
ta5es, pre"iu"s and loan
a"orti6ations #ithheld
fro" e"ployeesL salaries
in the $ooks and e&ect the
necessary ad'ust"ents in
the $ooks Also, updated
su$sidiary ledgers of
these accounts "ust $e
"aintained for "onitoring
purposes and to a*oid
penalty for delayed
re"ittance to the ofces
concerned
Partially
7"ple"ented
;o*ern"ent D%uity
Account #as understated
$y P9,!9-,30.
Ae reiterate our last
year=s reco""endation
that Regional
Accountants should
reclassify Capital (tock,
Appraisal Capital and
8onated Capital
accounts to ;o*ern"ent
D%uity
1ot yet
i"ple"ented
Corresponding "e"o
shall $e issued to the
Regional Accountants
to e&ect the 'ournal
entries
7nco"e accounts #ere
o*erstated $y P0,!-5,44!
due to the non2recognition
of <alue Added Ea5 on
Postal (er*ices in CAR
#hile Region <777 reported
an understate"ent of
Coordinate #ith the
+inance ,anager on the
proper treat"ent of the
<alue Added
Ea54Credita$le Ea5es
Aithheld to ha*e a proper
presentation of the inco"e
+ully i"ple"ented
52
Audit Observation Recoendation
E!tent o"
I#$eentation
inco"e $y P/3,9.9 account in the >nancial
state"ents
?nderstated4 ?nre"itted
9a"ination +ees in PPC2
1CR a"ounted to
P1,9!-,!!.
,anage"ent should
de"and for the proper
accounting of the
collection @ re"ittance of
la"ination fees for P78s
1ot 7"ple"ented
Attached
"e"orandu" $y
Reg=l 8irector
cancelling pre*ious
"e"orandu" on
co""ission on
la"ination
PPC could ha*e earned
additional inco"e of
P3,3!1,-55 had other PPC
regional ofces adopted
si"ilar 1CR circulars on
collection of la"ination
fees
,anage"ent should adopt
in all other PPC regional
ofces a policy regarding
collection of la"ination
fees si"ilar to that of 1CR
1ot 7"ple"ented
A4 attached "e"o
$y Regional 8irector
canceling pre*ious
"e"orandu" on
co""ission on
la"ination
Balances of the Ofce
(uppies and Other (upply
and ,aterials D5pense
accounts in the a"ount of
P-,1.3,--3 are not relia$le
PPC region < should
strictly follo# the general
processes in*ol*ing
dis$urse"ents and control
for supplies and property
and adopt the 1;A(
policies on reporting and
accounting of consu"ed
ofce supplies and other
supplies for accurate
accounting infor"ation
9ike#ise, adopt the R(,7
and R7( and co"pute the
cost of issued ite"s $ased
on ,o*ing A*erage ,ethod
#hich is authori6ed under
COA Circular 1os -..12
..4 and -..-2..- dated
Octo$er 0., -..1 and June
13, -..- respecti*ely,
particularly on the policy
Partially
7"ple"ented
53
Audit Observation Recoendation
E!tent o"
I#$eentation
that cost of issued ite"s
and ending $alance of
supplies and "aterials
shall $e co"puted using
the ,o*ing A*erage
,ethod
?npaid ter"inal lea*e
$ene>ts totaling P-5
,illion due to e"ployees
#ho retired in CF -../
#ere not recogni6ed as
current year=s e5penses in
Region <777 there$y
understating the e5pense
account2ter"inal lea*e
$ene>ts
,ake the necessary
ad'ust"ents4corrections on
the transaction
Dnsure that the generally
accepted accounting
principles are o$ser*ed in
the recording of
transaction and
presentation of +inancial
(tate"ent and disclosure
,ake the follo#ing
ad'usting entry to
recogni6e the appropriate
paya$les in the $ooks, to
#itG Prior Fears Ad'ust"ent
P-,54/,0!3 Accounts
Paya$le
Assign a responsi$le
personnel for the
"aintenance of ledger
card and depreciation
schedules to ensure
co"plete and accurate
recording
,ake the necessary
correctness4ad'ust"ents to
the accounts a&ected
Cause the refund of the
pay"ents of RAEA and
D,D #ithout supporting
docu"ents $y the
persons4ofcials
Partially
7"ple"ented
CF -../ Eer"inal
9ea*e Bene>ts #as
recorded $ut CF
-..! #as not
recorded due to a
Philpost ,e"o issued
in Jan -..! fro"
AP,; +inance not to
record optional
retire"ents
54
Audit Observation Recoendation
E!tent o"
I#$eentation
concerned
7"proper treat"ent of
e%uip"ent purchased in
CAR to the ,aintenance
and Other Operating
D5penses account resulted
in the non2recognition of
assets #orth P15!,-94
O$ser*e the proper
charging of e5penditures
and re%uest additional
$udget #hen #arranted
Record the e%uip"ent
purchased to the
appropriate account

1ot yet 7"ple"ented
Personal (er*ices D5pense
Account is understated $y
P1,94/,... #hile
,aintenance and Other
Operating D5penses is
o*erstated $y P9-9,!54
,ake the necessary
ad'usting4 correcting entry
1ot yet i"ple"ented
O*erpay"ent of P1..,351
for salaries and o*er
re"ittance of P54,.1/ for
pre"iu" contri$ution to
;(7(, Philhealth and Pag2
i$ig +und due to the delay
in infor"ing the Accounting
(ection of Region <777
regarding e"ployees on
lea*e #ithout pay and
those #ho retired or
resigned fro" the ser*ice
7ssue "e"orandu" to all
e"ployees re%uiring those
#ho intend to resign or
a*ail of optional retire"ent
to notify in #riting the
Personnel (ection at least
0 "onths prior to the date
of their
resignation4retire"ent
fro" the ser*ice
,onitor e"ployees #ith
respect to ter"ination of
ser*ices such as death,
transfer, resign, AAO9,
etc and to i""ediately
infor" the Accounting
(ection to a*oid
o*er4erroneous pay"ent
Re%uest ;(7( to refund the
pre"iu"s paid for those
e"ployees #ho are
already retired or resigned
1ot yet i"ple"ented
55
Audit Observation Recoendation
E!tent o"
I#$eentation
MANA%EMENT ISSUES
8elay in the su$"ission of
co"plete >nancial reports
Ae reiterate that the
Accounting Personnel
should undergo training
and se"inars to attain
efciency in the
preparation and
su$"ission of >nancial
reports #ithin the
prescri$ed deadlines
Ae also reiterate the
i"ple"entation of 'o$
rotation and re2assign"ent
of personnel in ter"s of
#orkload in confor"ity
#ith $asic internal control
"easures
Ehe PPC2CAR should
re%uest fro" Central Ofce
personnel to aug"ent its
present co"ple"ent
and4or to >ll up the *acant
position of the Regional
Accountant
PPC Region 3 should
instruct Post"asters to
su$"it +inancial Reports
on ti"e
PPC2Region 7N should
pro*ide additional
co"puters in its
Accounting (ection

1ot yet i"ple"ented
Pay"ent of year end
>nancial incenti*e,
su$sistence allo#ance and
Ae reco""end
co"pliance to e5isting
pertinent rules and
1ot yet i"ple"ented
56
Audit Observation Recoendation
E!tent o"
I#$eentation
per die" to the "e"$ers
of the PPC Board of
8irectors for the year -../
in the aggregate a"ount of
P05.,..., P-,.4.,... and
P-,144,44! respecti*ely
has no legal $asis
regulations on the $ene>ts
accorded to the go*erning
$oard of the corporation
PPC did not appropriate
sufcient funds for the
;ender and 8e*elop"ent
Progra" of the go*ern"ent
contrary to the pro*ision of
the ;eneral Appropriations
Act
Allocate funds for ;ender
and 8e*elop"ent pro'ects
and acti*ities in
accordance #ith the
pro*isions of the ;eneral
Appropriations Act
Co"ply #ith the guidelines
of 1D8A41CR+A Joint
Circular 1o -..421 in the
preparation of annual ;A8
plan and $udget and the
su$"ission of
acco"plish"ents report
Partially
7"ple"ented
8ue to tight >nancial
constraints, #e
cannot co"ply #ith
the 5K re%uire"ent
of the Personal
(er*ices annual
$udget allocation for
;A8, ho#e*er, a
;A8 a#areness
progra" is
incorporated in our
$udget for training
Reiterated in +inding
1o 14
8elayed
procure"ent4printing of
ofcial receipts caused the
non2issuance of ORs in
se*eral 1CR post ofces
and regional post ofces in
*iolation of (ection 3! of
P8 1445 and B7R rules and
regulations
,anage"ent should
e*aluate the agency=s
procure"ent syste"O
deter"ine the "ost ideal
re2order point for the
printing4purchase of OR to
pre*ent shortage
Partially
7"ple"ented
Ehe Ofce of the
Asst Post"aster
;eneral for
Ad"inistration has
already ans#ered
this concern in the
last COA -../ Audit
O$ser*ation
57
58